Idavang A/S

The ceremony of laying a capsule in the construction of Russian-Danish enterprise IDAVANG Luga was held in the Luga region. Eco-friendly stockbreeding complex will increase pork production in the Leningrad Region by 25%.

Idavang Agro has been working in the region for almost 10 years and it created a closed environmentally friendly pig production during these years. Nowadays, 98 thousand stock animals are fattening, but the investor intends to increase capacity. The investment project envisages the construction of a second high-tech unit for reproduction and fattening of full-cycle pigs with a capacity of 10,000 tons of meat per year, said Tatyana Sharygina, director general of Idavang, OOO. The products for sale will be commercial pigs with live weight up to 112 kg. The planned volume of investments is more than 2.5 billion rubles, half of which is borrowed funds.

Denmark’s Idavang Agro will build a new pig farm in the Luga District with an annual capacity of 100,000 pigs on a site with an area of 1,800 hectares. The groundbreaking ceremony is scheduled to take place in the summer of 2015. The construction of the facility will be completed within 18–24 months. The payback period is projected to be eight years. The margin depends on exchange rates and the overall economic environment and is expected at least at 10%. Talks are currently underway with commercial banks (Rosselkhozbank, Sberbank and Bank Saint Petersburg). The company awaits project approval by the Ministry of Agriculture to enjoy a subsidized interest rate and repayment of up to 20% of direct investments. Investors will contribute their own funds to pay for 30% of the project, and borrowed funds will account for the remaining 70% of the project cost. The initiative is not the first project by Danish investors in the region. In 2008, the company bought and reconstructed a 190,000-capacity pig farm in the Tosno District, and another swine facility currently operates in the Pskov Region. Their combined annual capacity totals 300,000 pigs. Investments in both projects are estimated in excess of RUB 4 billion. The project in the Tosno District has already paid back its costs. Idavang Agro is planning to further expand its combined annual capacity to 500,000 pigs. Investors say there is no connection between their expansion plans and the embargo — the Danish owner had originally planned to build five pig farms in Russia. Russia’s pork deficit is currently estimated at 30%–40%; therefore, investors are certain that their products will enjoy strong demand in Russia.